Dean-
I also get that newsletter (for about 5 months now), but I have owned NM since spring of 1995. I think I may cancel my subscription with it.
The lawsuit will have negligible effects on the company. They are indemnified from any penalties by the company that created the Ab Roller Plus. The only negative effect is the discontinuation of the domestic sales of the product. The product marketing was nearly finished anyway, so NM is not going to lose much potential revenues at all. Check out the company's response to the lawsuit at NM's press release archive: prnewswire.com^1
I already told you why I think the stock price is going up. I think the dip in price early this week presented an buying opportunity. I still expect a buyout. The fact that Pete Musser was named to the board makes the situation even better. Musser, the CEO of Safeguard, and his other Safeguard officers, now control the NM board of directors. I believe they have a majority of the directors, but I'm not sure. It was Safeguard that put Mark Hershhorn in as Pres & CEO back in 1994, and saved the company from bankruptcy.
My "turnaround" was actually not so. I have been extremely bullish on this company from the beginning. When the stock tanked continuously, especially before bad news, and then the news emerged about McAdams resigning because of apparent incompetency, I was really ticked off. I thought about selling, only to take advantage of my considerable loss for tax purposes. I had intended to buy the shares back this month.
Then I decided that the problems were a temporary phenomenon and the stock would rebound. I figured that if the stock recovered 2 or 3 points during the 30 days following my sale, the benefits of my tax write-off would be eliminated. In addition to the possibility of a takeover at such a low price, I reconsidered and bought more.
The situation looks very good now.
-Todd |
